"Oct. 18 (Bloomberg) -- Citigroup Inc., the bank 12 percent- owned by U.S. taxpayers, said profit surged, beating analysts’ estimates as the company reduced loan-loss reserves by $1.99 billion.
Third-quarter net income was $2.17 billion, or 7 cents a share, compared with profit of $101 million, or a loss of 27 cents after preferred dividends, in the same period a year earlier, the New York-based bank said today."
Let's see now. The net income was $2.17 billion, but the loan-loss reserves were reduced by $1.99 billion. Oh, almost all of the third quarter net income was due to it reducing its loan-loss reserves. Nice trick, Citigroup. What is your justification in the face of the current mortgage mess? There is the real probability that you are going to have to buy back all those worthless mortgages that you sold. That is, the potential for hundreds of billions of dollars in losses that will have to be eaten by you. If anything, the loan-loss provision should have been increased, not decreased Citigroup.
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